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BY
Matthew Parsons

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What does it take to start your own online travel business?

More than 200 travel technology businesses attracted £2.5 billion of funding in 2016, while more than three quarters of UK holidaymakers booked a holiday online in that same year, according to technology-specialist PR agency Clarity PR. And according to market research firm Statista, digital travel sales are forecast to reach more than £600 billion per annum, globally, by 2020.

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What role does technology play in starting up?

So it’s no surprise that entrepreneurs are looking to make their mark in travel, with niche areas, such as the touring sector, currently seen as ripe for exploitation.

In the UK, some well-known names in travel are launching new companies, with a strong online focus. In particular, Laurence Hicks, former managing director at Wendy Wu Tours, is excited about his imminent launch of Tour Hound. An aggregator that helps users find the right touring holiday will initially target consumers, and later offer a trade version.

Meanwhile, Kane Pirie (founder of Travel Republic) marks his return to the industry soon with new venture Vivid Travel. His co-founder Adam Gill (formerly IT director of dnata Travel) told TTG it was too soon to share too many details, although sign-ups are being encouraged at vivid.travel

The right mix

Technology investment is a major factor for any start-up, but other special ingredients are also needed to ensure success. For Tour Hound, Hicks will no doubt draw on his past experiences working at Inghams and Hurtigruten, as well as Wendy Wu Tours.

While at Wendy Wu, he recalls: “We were always struggling to find a platform that could find the sort of tour a travel agent could find. I’ve looked at the marketplace, and some aggregators are not aggregating transparently, for example there are preferred suppliers in place. We want to be an honest, credible aggregator.”

More than 25 operators have signed up so far, including G Adventures, Collette, Kuoni and Trafalgar Group – “all the majors”, Hicks adds. “We’re talking to more people every day – and they’re coming to us,” he says. “But what’s surprising is how few are geared up to share content, so it’s about getting the right kind of APIs.”

Hicks’ co-founder is Rhodri Evans, who founded technology company TigerBay in 2008, which was acquired by Atcore at the end of 2015. “It’s no easy path,” Hicks admits, “but Rhodri has been brilliant, we’ve been creative to capture content. We’ve developed the technology to convert the files into an aggregatable format.”

Far from easyAccording to Paul Richer, senior partner at Genesys Digital Transformation, launching a new travel business in the online world is far from an easy proposition. “You can have the best technology, top products and competitive pricing but this may still not be enough. If you search online for any travel product, you are inundated with links to travel companies that all look very much the same,” he warns.

“However, both Laurence and Kane are experienced travel entrepreneurs and will, no doubt, realise that the key to the successful launch of a new business is not to rely on being found on the search engines. So, I would expect to see these start-ups generating enough PR visibility, offline advertising and social media hype that prospective customers will go directly to their websites, so bypassing the competition.”

Indeed, Hicks says that his secret weapon will be the platform itself – and that he will bring this platform alive “with the hound”. “We’re looking to grow the brand quickly,” he says, adding that he is inspired by the insurance market: “Everyone needs a meerkat or an opera singer, and the travel industry is no exception to that.”

For anyone thinking of launching their own travel business, his advice for those looking to go down the technology route is: “Make sure you’ve got a good technology partner that is prepared to journey the whole way.”

As for Tour Hound, he says he has put aside a “war chest” and is gearing up to “attack the online market”. The B2C business launches this week, as he believes consumers are the ones who struggle to find a tour. However, a B2B2C platform is also planned. “We’ve also identified a tool that can be easily developed for the trade,” he says.

Model value

Matthew Barker, chief executive of I&I Travel Media, has spent more than a decade helping operators with online marketing. Last year he launched Horizon Guides – a series of digital guidebooks that are published with a “travel partner” to help grow their bookings. In his experience, he says he is wary of the aggregator model in the touring sector.

“Overall, there are a few fundamental problems to the aggregation/meta-search model as it applies to the tours and activities segment: aggregating at volume makes it easier for the OTA to acquire users, but it doesn’t necessarily make it a viable sales channel for the individual operators,” he claims.

“This is especially the case with the high-volume models where the OTA lists as many operators as possible. All that does is to replicate the intense competition that already exists on paid search, SEO and social media on a new platform, usually with an entirely new ranking system for the business owner to deal with. As elsewhere the larger operators seem to do okay, and the smaller ones sink down the rankings into obscurity.

“Quite often the feedback we hear from smaller tour operators is that they’ve been listed on all these sites, but they don’t know how to gain visibility or traction within them – so they provide all their content and inventory but rarely see much uplift in sales.”

However, on a B2B level, one new company, Tripfuser, is seeking to help the smaller companies online, by connecting “local experts” to customers – and its platform is designed for travel agents. Agents can log in to Tripfuser to design a client’s travel experience by creating a wishlist, or by searching sample trips in the Tripfuser Trip Gallery, that can be booked, or personalised. Agents receive commissions on bookings.

Matt Beard, founder and chief executive, says this kind of personalisation offered through the platform makes the new service an industry first: “Tripfuser is the first major travel platform to offer this level of bespoke travel planning, which allows agents direct access to an open marketplace so they can provide varied and competitive proposals for their clients,” he says.

“We created this platform to offer significant added value to agents and their clients. To date, it has been challenging for travel agents to find custom product tailored to their clients’ interests without being in the destination to speak with locals directly. Agents can now provide a higher level of service to clients looking for a bespoke itinerary catering to their individual preferences.”

Personalisation, as ever, seems to be the name of the game and the abundance of creativity, coupled with investors ready to gamble on the next big thing, means 2018 looks set to be an interesting time for the travel industry.